Question

Assume the same facts, except that Christina repurchased only 60 shares for $3,120. What is Christina's deductible loss on the sale of 120 shares? What is her basis in the 60 new shares? Deductible loss Basis

Answer 1

Christina's deductible loss on the sale of 120 shares and her basis in the 60 new sharesChristina's deductible loss on the sale of 120 sharesChristina's deductible loss on the sale of 120 shares can be calculated by subtracting the proceeds from the adjusted basis. The adjusted basis is calculated by multiplying the basis per share by the number of

shares owned before the sale and adding the commission paid. Therefore,Christina's adjusted basis for 120 shares = $8,800 (80 shares * $110 basis per share + $400 commission)Christina's proceeds from the sale of 120 shares = $5,760

(120 shares * $48 per share)Christina's deductible loss = $3,040 ($8,800 - $5,760)What is Christina's basis in the 60 new shares?The basis of the 60 new shares is calculated by multiplying the basis per share by the number of new

shares purchased and adding any commission paid. Therefore,Christina's basis for 60 new shares = $3,120 (60 shares * $52 basis per share)Thus, Christina's deductible loss on the sale of 120 shares is $3,040 and her basis in the 60 new shares is $3,120.

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